December 22, 2008

"Education is an admirable thing, but it is well to remember from time to time that nothing that is worth knowing can be taught." ~Oscar Wilde

Even the most brilliant of individuals with the highest of academic degrees and broad life experiences can fail miserably if they are without good judgment -- or what we may refer to as wisdom. Examples of these failures can easily be found in investing, politics, the business world and your immediate surroundings...

In the holiday spirit of giving, I wrote another guest post for one of my favorite bloggers, Jeremy Day, of Insight Writer. Please check out the post, Knowledge is not Wisdom, and take a look around Jeremy's blog while your at it!

I'm also excited about a special Christmas addition to my philosopher pages I am planning for publishing, here at The Financial Philosopher, on December 24...

October 23, 2008

"Live as if you were living a second time, and as though you had acted wrongly the first time." ~Viktor Frankl

Today, I have some perspective for you that may be a bit of a challenge for your heart and mind but something that may help you put this financial crisis in its proper place -- and to see it as an opportunity -- not just to buy stocks -- but to take a look at your life, your priorities and your pursuits and how they are aligned (or misaligned).

To set up the following passage, you should know the setting: The highlighted words today come from Viktor Frankl's book, Man's Search for Meaning, which is set primarily in a German concentration camp during World War II.

Frankl, a behavioral psychologist and Jewish Holocaust survivor, observed among his fellow prisoners "that only the men who allowed their inner hold on their moral and spiritual selves to subside eventually fell victim to the camp's degenerating influences."

Frankl makes many anecdotal observations in the book -- some are quite horrific -- but they all offer profound lessons on life... like this one:

This young woman knew that she would die in the next few days. But when I talked to her she was cheerful in spite of this knowledge. 'I am grateful that fate has hit me so hard,' she told me. 'In my former life I was spoiled and did not take spiritual accomplishments seriously.' Pointing through the window of the hut, she said, 'This tree here is the only friend I have in my loneliness.' Through that window she could see just one branch of a chestnut tree, and on the branch were two blossoms. 'I often talk to this tree,' she said to me. I was startled and didn't quite know how to take her words. Was she delirious? Did she have occasional hallucinations? Anxiously I asked her if the tree replied. 'Yes.' What did it say to her? She answered, 'It said to me, I am here -- I am here -- I am life, eternal life.'

When life hits you hard, do you find meaning in your suffering? Do you find opportunity in adversity? Do you run from a challenge or embrace it?

Frankl and his book has helped me and millions of others see that meaning (and suffering) does not come from outside of ourselves. I highly recommend reading it...

October 17, 2008

As an investor, if you were offered an average rate of return, of say 8% annualized, in exchange for lower volatility and lower relative stress, would you accept this offer?

Or, if you are a trader with a passion for active investing, would you still be a trader if you were paid only a modest salary with a small cost of living increase each year, and no chance of bonus? How about if there were no money involved at all? Would you still enjoy it?

I'll end my week-long run of Uncommon Wisdom with the same philosopher it began, Blaise Pascal (1623-1662):

A given man lives a life free from boredom by gambling a small sum every day. Give him every morning the money he might win that day, but on condition that he does not gamble, and you will make him unhappy. It might be argued that what he wants is the entertainment of gaming and not the winnings. Make him play then for nothing; his interest will not be fired and he will become bored, so it is not entertainment he wants. A half-hearted entertainment, he must delude himself into imagining that he would be happy to win what he would not want as a gift if it meant giving up gambling. He must create some target for his passions and then arouse his desire, anger, fear, for this object he has created, just like children taking fright at a face they have daubed themselves.

So which is it: The "entertainment of gaming" or "the winnings" that you seek? Perhaps these market conditions will have many investors and traders seeking the alternative choice of passive investing...

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The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.